Teaneck Limo Stop-Work Order Serves as a Six-Figure Warning on New Jersey’s ABC Test

On May 20, 2026 the NJ DOL issued a stop-work order against Kismet International Inc – a limo and taxi company- after an audit that covered 2012-2015 found the company misclassified 80 drivers. As a result, the Department claims the company owes over $200K in outstanding liabilities.

This is a useful case example for NJ Businesses on the consequences connected to worker classification.

In a 2023 Appellate Division opinion, an earlier amount of ~$91K in unpaid unemployment and temporary disability contributions was indicated; the bigger number in 2026 seems to be a more recent calculation by the DOL on the outstanding liability connected to the stop-work order and probably includes additional charges (interest and penalties as an example) but the press release isn’t clear on how the amount grew by over $100K. One note that’s important to keep in mind – the DOL didn’t issue a release immediately after the first finding – Kismet challenged the DOL’s conclusion but the department’s decision was upheld.

Under New Jersey’s ABC test, a worker is generally presumed to be an employee unless the employer can satisfy all three parts of the test. Calling someone an independent contractor, issuing a 1099 or having a contract that says “independent contractor” doesn’t automatically make someone an independent contractor under state law.

The 2023 case shows the company pushed back on the DOL’s application of the ABC test – what NJ uses in worker-classification cases.

In Kismet’s case, the NJDOL found that the company “misclassified the bulk of its workers as independent contractors instead of as employees.” and shared the basis of its opinion across the three-prong test.

Going prong by prong.

Prong A: Is the worker free from the employer’s control or direction?

The court declined to substitute its judgment for the Department’s and noted there were facts suggesting the drivers operated independently in some respects but other facts that showed the company exercised control. Kismet wasn’t able to show the DOL’s finding to be arbitrary, capricious or unreasonable – so the court left the Department’s Prong A finding in place.

Prong B: Is the service outside of what the business usually does or performed outside the employer’s places of business?

Here, Kismet won on an important point. The DOL treated the drivers’ cars as an extension of the company’s place of business, which the Appellate Division rejected as overly broad and unreasonable. However, under the ABC Test, an employer needs to hit all three prongs; winning one isn’t enough.

Prong C: Are workers customarily engaged in an independently established trade, occupation, profession or business?

The Court sided with the DOL on this one saying the company offered little evidence showing its drivers operated as truly independent businesses during the audit period. Even the fact that some drivers worked for other passenger transportation companies wasn’t enough because there’s a difference between having more than one job and being an independent business providing a service to another business.

While the opinion was unpublished/not binding, it still provides useful context for the stop-work order announced by the NJDOL.

There’s a pretty clear takeaway in the Kismet story; this isn’t just a paperwork issue- mis-classification carries really big implications for small businesses and connects to unemployment, disability, payroll, tax, benefit, worker protection and ‘fair play’ obligations.

Not hitting those obligations as a business starts a meter that gets really expensive super quick, especially when you consider it can track for years. Remember, the audit on Kismet was from 2012 through 2015 and the stop work order occurred approximately 11 years after that end date. That’s a long time to have state bean counters and lawyers on your back.

So the key lesson here, if a worker…

-is central to the business
-performs work under the business’s direction
-is not operating a truly independent business

then classifying them as independent contractor can lead to issues attached to big dollar signs.

Kismet also shows how legally complicated this can get as NJ looks at the actual relationship and whether, according to the law, a worker is truly independent –  being partially right isn’t enough; all three prongs need to be satisfied.

There’s also a public benefit angle to all of this…

For workers, it’s about receiving the protections tied to employee status.

For a taxpayer and businesses that do play by the rules, it’s about whether companies are paying their fair share into unemployment and disability benefits.

The NJDOL said stop-work orders can be used to halt work being performed in a way that violates state labor laws or regulations, that the Kismet order remains in place until the award is paid in full. The department also stated that workers are to be paid during the time a stop-work order is in effect, for up to 10 days.

The Department said its Employer Accounts division has issued nine stop-work orders and 123 notices of intent to issue a stop-work order, leading to the recovery of $2,304,915.55 in outstanding liabilities. NJDOL also said its Wage and Hour Compliance division has issued 223 stop-work orders since those powers were expanded in July 2019.

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